What's happening: As of Monday at 1:00 p.m., shares of SINA Corp. (NASDAQ:SINA) were down 10.2%, while fellow Chinese Internet company Sohu.com (NASDAQ:SOHU) had fallen 12%. The moves came amid no company-specific news, but rather as investors shrugged off efforts by Chinese officials to stabilize the country's volatile markets.
Why it's happening: Keeping in mind the Shanghai Composite Index has lost 26% of its value since June 12 -- albeit after climbing nearly 60% from the start of 2015 -- Chinese regulators over the weekend announced a number of moves intended to stabilize the market. China's central bank, for one, will provide capital to China Securities Finance Corp. intended to make additional financing available for margin lending, while China's 21 largest brokerages stated on Saturday they would spend over $19 billion to buy Chinese stocks. In addition, dozens of Chinese companies have put IPO plans on hold as the government organized a halt on new share issuances.
Initially these moves appeared to have the desired effect with the Shanghai Composite opening the day nearly 8% higher. But investors quickly took their gains off the table, with the index closing up around 2.9% when all was said and done. Considering Sohu and SINA currently trade at a seemingly rich 53 and 33 times next year's estimated earnings, respectively, it's relatively unsurprising they were hit harder than most as the broader Chinese market pulled back. But in the end, this volatility has little to do with the underlying businesses, so I'm still convinced investors would be wise to filter out the noise and focus on their companies' long-term efforts to drive shareholder value.
Steve Symington owns shares of Apple. The Motley Fool recommends Apple, Sina, and Sohu.com. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.